Lexington startup adds speed to Big Data

Sunday

Oct 7, 2012 at 6:00 AM

Peter Cohan WALL & MAIN

the analysis of trillions of pieces of data to find a needle of insight in a haystack of noise — is a huge business. I recently spoke with the chief executive officer of a Lexington company with the potential to play a big role in a piece of that market.

Back in June, I wrote, “Will Worcester Miss the $64 Billion Big Data Opportunity?” and concluded that it had a shot at getting its share. John Partridge, the president and CEO of Tokutek Inc. — a Lexington company founded in 2006 that makes databases run faster — read the article and contacted me.

A database is a piece of computer software that stores data. You could think of it as a spreadsheet on steroids, because it must be able to store and retrieve enormous quantities of data very quickly. For example, imagine all the point-of-sale terminals at the 8,500 Wal-Mart stores around the world as they process customers who are waiting to pay for their goods. If they use a credit or debit card, Wal-Mart has to decide whether each customer's card is valid and make a decision in seconds.

Without getting into all the details of how that works, suffice it to say that the terminal through which you swipe your card has to take the information on the card's magnetic stripe, send it through several participants — such as a payment gateway, a processor and a credit card interchange — before ultimately getting to the computer of the bank that issued your card to check whether the account information on that stripe matches its records, and whether you have enough money or credit in your account.

It will then send back a message alerting the cashier to either accept the card or ask the customer to use another one or pay in cash. And to do that, the bank's computer must look up your information in a database that probably contains the records of millions of other cards. Every transaction changes the balance in your account, and as the bank gets new accounts or closes existing ones that database must be updated to reflect accurately such changes as they happen.

And that means that if a database can do all that changing more quickly the businesses that use them will be able to operate more efficiently and earn higher profits.

So it should come as no surprise that if a company came along with a better way to manage databases it would interest the companies that use them. And that is what Mr. Partridge claims Tokutek's database can do — running “16 times faster than conventional databases.” Moreover, he argues that the company's product's “value story rests on three legs: Performance advantages, greater agility, and cost savings.”

Mr. Partridge likes what he calls “start-ups based on algorithms.” The reason is pretty clear — if the algorithm is better than its competitors and it works on a big problem then the company that operates that algorithm will be quite successful. A few examples are Google, which was built on advanced search algorithms, and RSA, a company that commercialized new encryption algorithms for security.

So far Tokutek has signed contracts with no fewer than 12 companies, including Intent Media and Limelight Networks that use its TokuDB, “a high-performance database storage engine” that runs on two kinds of databases — MySQL and MariaDB. TokuDB allows these databases to add more data, to improve speed of response to questions of the database, and to reduce the amount of data that needs to be stored and transmitted through excellent compression.

Mr. Partridge brings an impressive résumé to the task of building Tokutek. He has at least 20 years of experience in the software industry as a developer, investor and entrepreneur. He joined Tokutek from StreamBase Systems, which he co-founded with database pioneer Dr. Michael Stonebraker. His first job was as a Microsoft software developer, where he co-authored the first version of Excel.

He was later a venture capitalist for six years at Accel Partners and the Summit Accelerator Fund, where he invested in early stage Internet infrastructure and enterprise software companies. And he has a bachelor's degree in applied mathematics/computer science from Harvard and a Master of Business Administration degree from Stanford Business School.

Tokutek's initial market is relatively small. He estimates that the opportunity for MySQL is “in the hundreds of millions of dollars.” Tokutek charges clients based on the amount of data. For example, a terabyte (a trillion digital words) goes for $25,000 a year. But Tokutek's algorithms can be applied to virtually all databases, a $20 billion opportunity.

And Mr. Partridge has 15 people in three offices — Lexington, New York City and Seattle — with capital from Galileo Partners. His goal is to use these resources to expand Tokutek by applying its indexing technology to more different kinds of databases.

If Tokutek finds its way into Wal-Mart that may mean you can get through the checkout process much faster.

Peter Cohan of Marlboro heads a management consulting and venture capital firm, teaches business strategy, and is the author of 10 books. His column runs Sundays and Wednesdays on telegram.com. His email address is at peter@petercohan.com.